The WTO and the Forests

by Victor Menotti

Earth Island Institute Journal, Winter 2000

The WTO's Global Free Logging Agreement (FLA) would accelerate
the logging of native forests, weaken environmental protections,
and open the door to invasive species. The FLA is seen as such
a threat that more than 130 groups have signed a letter demanding
an immediate halt to the FLA negotiations. (No environmentalists,
workers, or community leaders were represented at the FLA discussions.)

US Trade Representative Charlene Barshefsky has told Congress
that the FLA is a "top negotiating priority" Barschfskys
advisors include executives from logging giants like Weyerhaeuser,
Boise Cascade, International Paper, and Georgia-Pacific.

International Paper CEO John Dillon has informed Washington
that signing the FLA "is essential to the future success
and growth of the US forest products industry"

Meanwhile, Deputy US Trade Representative Susan Esserman has
assured timber lobbyists that the FLA is "very important
for us and for the President" and has promised to "seek
conclusion on the agreement" in Seattle.

More Logs, More Bugs

The FLA would eliminate tariff barriers (such as import taxes)
and non-tariff barriers - that could include any environmental
laws deemed to "inhibit" or "distort" trade.
Industry studies project that eliminating tariffs on wood products
could increase consumption by three to four percent worldwide.

The timber industry hopes to target raw log export bans, government
purchasing rules favoring recycled paper or timber from certified-sustainable
sources, and local building codes that require the use of non-wood
materials.

Non-tariff measures up for elimination include measures to
prevent the entry of invasive species. "Bioinvasion"
is now the second leading cause of species extinction in the world,
after habitat destruction. the WTO currently sets strict limits
on what regulations governments can use to prevent the entry of
invasive species. The US and other countries are advancing proposals
that could challenge even these surviving safeguards as a barrier
to trade.

Genetically modified organisms (GMOs) - another emerging form
of biological pollution - are also under discussion at the WTO.
The introduction of GMO crops and trees poses risks to native
fields and forests. GMOs may migrate, mutate, multiply, and transfer
manufactured traits to other organisms and species - with unpredictable
results. The WTO is proposing new global trade laws that would
prevent governments from stopping GMOs from entering their country.

Opening Up Native Forests

The WTO is preparing to introduce a broad agenda to promote
and protect multinational logging investments. Brazil, Russia,
Mexico, Indonesia, and other countries with significant tracts
of native forest have traditionally limited foreign access to
natural resources to prevent their exploitation by absentee owners.
Proposed WTO investment rules would remove such government controls,
require nations to treat foreign investors on the same terms as
domestic ones, and institutionalize cut-and-run logging around
the globe.

The WTO's proposed investment rules would remove the ability
of governments to promote sustainable natural resource use. A
WTO proposal to ban "performance requirements" would
outlaw many of the preconditions that governments demand from
foreign investors to ensure that some benefit actually accrues
to the local economy Examples include the promise to transfer
green technologies, the commitment to export a certain percentage
of production (important for countries in debt), or the assurance
of remaining in a given community for an agreed period.

Weakened Eco-Laws

The WTO plans to redefine the "expropriation" of
a foreign investment so broadly

that it would allow any corporation to sue any national government
for enacting measures that "have the effect" of reducing
the foreign investors "planned profits." Such investment
rules already exist under NAFTA. If adopted as a global rule under
the WTO, laws designed to protect forests (or indeed, anything
in the public interest) could be challenged as an illegal "expropriation,"
requiring full cash compensation to the foreign investor.

A showdown is coming as the WTO prepares to establish new
pro-industry rules on logging practices that would override the
more rigorous environmental standards set by the Forest Stewardship
Council.

The US timber industry now says that it cannot compete against
logging operations in countries with little or no environmental
regulation or enforcement. US timber interests have specifically
named the US Endangered Species Act as the biggest burden on US
competitiveness.

Timber interests now want a set of harmonized global rules
to "level the playing field. If adopted, these industry-set
WTO standards would lock in weak protections in countries with
major reserves of native resources (Canada, Mexico, Chile, Brazil,
Indonesia, and Russia), while exposing relatively stronger protections
(such as exist in the US) to challenge under the WTO.

Jobs, Jobs, Jobs?

US corporations are trying to promote this WTO agreement as
a job-creating initiative for US workers, but industry trends
make this claim suspect.

In recent years, billions of dollars were invested in new
paper-mills in 'cheap-labor" countries like Indonesia and
Brazil. The logic of global capitalism will likely send most of
the new jobs to "lower-cost" nations.

Whether you are working to protect endangered species, reduce
wood-fiber consumption, promote certified timber, encourage community-based
forestry, or protect old-growth trees, the WTO is on a collision
course with your efforts.

In recent years, the international forest protection community
has developed a voice to influence the lending policies of the
World Bank and other multilateral development institutions.

We now must do the same with trade and investment policy -
the new arena of forest protection.

Victor Menotti is Director of the International Forum on Globalization's
Environment Program.